In just 11 years, electronic requests for proposals have grown from novelty features on hoteliers' Web sites to an entire subindustry with hundreds of facilitators, templates, and tools. The technology for e-RFPs has remained relatively static over the past decade, but changes in the meetings industry and business environment have had a profound effect on the number of planners sourcing their meetings online.

Only about 15 percent of all meetings are sourced electronically, experts say, but that figure is growing fast. “Over time, we're going to hit that 40 percent or 50 percent rate,” says Bob Bennett, senior vice president, supplier market, for Philadelphia-based StarCite, which offers e-RFP services among its online meeting-management tools.

Gen X and Strategic Planning

A number of factors are driving the growth of e-RFPs. “Demographics have a lot to do with it,” says Bennett. “Generation X has been brought up with the Internet as a tool that they want to use and choose to communicate with.” The new generation of meeting planners is comfortable chatting with properties through e-mail before setting a date for serious negotiations.

Even more important is the promise of increased productivity. Meeting planners are being asked to do more with less, and the hope is that e-RFPs are an effective way to work more efficiently because they automate many steps in the sourcing process, allowing planners to invite more properties to bid on a program.

The use of e-RFPs is often one of the first steps of a strategic meeting planning initiative and, when deployed effectively, can help to demonstrate the value of the initiative — and the meeting professional.

We Still Have to Talk

Despite the benefits of electronic bidding tools, there are still challenges. One of the biggest is the potential for damaging the relationships between buyer and seller. “[An e-RFP] doesn't allow us any contact with the potential client. We can't negotiate or qualify further what the needs of the client are. We're solely dependent on the information that comes through the e-RFP,” says Linda Montgomery, director of sales for Crowne Plaza Atlanta Airport Hotel.

“What we've gleaned from planners is that it's all about response time — the quicker the better,” says Montgomery. But a little communication could go a long way, she says. Even a simple online instant messaging function allowing them to clarify points of an RFP would help streamline the bid process.

Buyers, too, may be better off retaining a human touch in site selection. While e-RFPs can be great for expediting the communication flow and documenting relevant data, the buyer and seller still need to maintain their relationships through other means. As Rodman Marymor, CEO of Berkeley, Calif.-based meetings technology consulting firm Cardinal Communications, says, the technology does not negotiate your deal. Planners still have to pick up the phone at some point.

Help! Standards Needed

Another challenge is the overwhelming volume and variety of e-RFPs. Hoteliers are enthusiastic at the prospect of more sales leads but have had to redistribute resources to address the deluge of e-RFPs, says Carol Lynch, vice president of group global sales for Starwood Hotels & Resorts. “So many times you think the technology is going to save the day,” but, she says, that has meant modifying Starwood's processes. “It has changed the way we deploy, the way that we look at our customer base, and the volume we have.”

The variety of templates and tools has also made e-RFPs less effective. The lack of a standard means hotels cannot streamline the hundreds of requests that they receive each week, says Dale Beckles, president and CEO of Toronto-based meetings tech provider Arcaneo. Hoteliers often don't respond to unfamiliar e-RFP formats.

One more problem is a mounting ethical dilemma about how third-party RFP facilitators earn their revenues. Third-party facilitators often maintain an online database of meeting properties, help organizations to define where an e-RFP will be sent, and help to aggregate the responses. The problem arises when a third party accepts payment from both properties and buyers, says Beckles. Buyers might want to question who their e-RFPs are reaching, and if their meetings-management tool is putting all properties on equal footing — or if preferred suppliers are considered first. For RFP facilitators with searchable venue databases, another challenge is ensuring the inventory is up to date.

Bringing Back Humans

Within the next five years, e-RFP tools will continue to evolve, observers say. The process of sourcing small meetings will trend away from sending e-RFPs to an array of properties and toward direct online booking. Neither planners nor hoteliers want to spend a lot of time processing involved RFP forms for simple day meetings.

Large or high-touch events will likely continue to be sourced through the e-RFP process, but observers see a move toward bringing back the human touch, with more communication among customers, facilitators, and hotels.

One company that is moving in that direction is Sabre-owned GetThere, Southlake, Texas. It partnered with HelmsBriscoe, Scottsdale, Ariz., a site selection company, last year to add a layer of human management to the e-RFP process. Events registered with GetThere's DirectMeetings Tool can be sent at no cost to HelmsBriscoe's agents for the bidding process. HelmsBriscoe sends out the e-RFPs and promises an availability grid of appropriate hotels within 24 hours. GetThere product manager Jeremy Stubbs says the company found that customers appreciated a more personal process.

HelmsBriscoe's vice president of corporate development, Jason Johnson, says that a consultative approach can save an organization time and money. An agent has more flexibility to adjust dates and destinations to save money. “Now that it's a seller's market,” adds Stubbs, “I have to convince a property that they want this meeting. Being constrained to an electronic format, you may not be as successful.”